Shunning home ownership leads to early retirement 

Life Changes Quick. It's true. I went from having $1,000 in the bank to saving up $500,000 to buy a home (which I also ended up not doing) by doing exactly what this couple talked about. I lived left CA and lived cheaply in Thailand, rented a low cost apartment, sold my car, and invested the money. At 35 I retired. I still don't own a house today, but could if I really wanted to. But it's no longer the goal.

Home ownership is not the issue, living beyond your means is.

As part of my retirement plans and also owing to the very shaky housing market now, I just sold a property in Philly and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains in months, I'm really just confused at this point...

More like two computer engineers making 300k or more with no kids = financial free.

"If you figure out money life is incredibly easy."- best quote from this video!

Bought my house 25 years ago but paid it off in 10 years and retired very early. No regrets.

I caught an interview they did in early 2021. They survived the pandemic and their account actually grew. I think they said they were up 40%. So from when they early retired, their balance went from $1 million to $1.4 million.

funny how we've been taught your home's an asset....

Most important message at last! “If you figure out money life is incredibly easy. If you don’t life is insanely hard.” You will not learn this at school of course. 😒

I've owned a home for the last 3.5 years and I can totally understand this. There's always something that needs to be fixed and building supplies are not cheap. I love my house, but one quote always stuck with me: "Your rent is the maximum you pay, your mortgage is the MINIMUM you pay." Yes, rents get raised but so do property taxes, utilities, insurance, interest rates, and building supply prices. I think ultimately it depends on the life you want to create, and for many, renting is much more cost-effective and convenient. I, however, have a $162,000 mortgage and look forward to having a mortgage-free home before early retirement.

I completely agree. Owning a home is not the "good thing to do" It's a liability that tricks you into thinking your doing what you should be doing.

These 2 people are awesome, it takes a strong will to not spend your money on every little desire. Save it and use the lump sum to retire early :)

Renting is NOT throwing your money away. You are paying for convenience. You are paying NOT to have property taxes. You are paying NOT to have mortgage insurance. You are paying NOT to have homeowner’s insurance. You are paying NOT to have maintenance costs. You are paying NOT to have HOA dues, if applicable. When I owned my own home, all of these were looming over my head on a monthly basis. I’ve since sold my place and happily went back to renting. Now I invest money I save into my retirement and now I travel a lot more. No regrets.

FIRE is an interesting community, but you don't have to literally "retire" either. You can take mini retirements while you're still young enough to enjoy them, work less, try working remotely while travelling, and more. You can keep growing your portfolio while living a balanced life, rather than relying on your current portfolio alone to support you for the next 70 years.

They should have bought the house for 500,000 and then sold it for 900,000.

I sold everything! Other tips: 1. You don’t need two cars. The one you do have should be bought out right without financing...buy used a smaller or used hybrid. 2. Get rid of cable TV and your TV (less commercials) but keep your WiFi however possible 3. Get cheaper cell plan 4. Kids don’t need smartphones 5. Grow your vegetables (you will loose weight in the process) 6. When you loose weight you may not need all those meds and the savings and health benefits are considerable 7. Avoid sugar. Why? You think more clearly, do not eat as much, sleep better and become more productive. I changed my life and it is sooo much less complicated and less stress. Positivity returned to my life.

In other news: having money leads to retirement. WOW!

My parents raised 5 kids, working and traveling around the world. It was a great childhood. But they did not “understand money.” What they did was buy a house in a promising suburb in the early 1960s, got a reliable estate/rental agent, and rented out the house to other families while we were in other parts of the world.

My wife an I have been flirting with this idea but one of the downfalls of renting is that you're at the whim of your landlord. If they decide to sell the rental property, you have to up and move a long with your family. I guess this is not always the case if you rent from a larger rental corporation like Medallion, Kaneff, or Daniels...

The smart solution now would be for them to make the minimum down payment on a house and rent it out while they travel. Move in after 10 years or so when the tenants have paid it off.

Step 1: Get high paying jobs. Easy. Step 2: Don't have kids, they'll only hold you back financially. Step 3: Live in a dump and pay cheap rent. Step 4: Don't buy cars. Just use buses, or better yet, don't ever go out. Step 5: Save more money by cutting your own hair.

This couple also looks like they have extremely high energy and don’t sleep so that also helps a tremendous amount. Using their brain for them is fun not a chore. Always underlooked with success and wealth

lol why is a $500k house even the goal

The craziest thing they said wasn’t about home ownership it was the concept of saving money. Somewhere along the way people have gotten the idea that they can become rich by borrowing money rather than saving it.

No kids, no anchor, and making shitload of money in some IT job, no wonder "money is easy" Who can save up $500 000 at such an early age! Give me a break!

Sorry, if you're listening to this and don't know any better, buying a home is a better option than renting. If you can buy a cheap home straight cash, do that. If you can't do that, save 20% to avoid PMI and have an emergency fund of three to six months of expenses before you get a 15 year fixed rate mortgage at no more than 25% of your take home pay. Think of your house, if it's located in an appreciating area, as a piggy bank. When you rent, that money does not go anywhere but your landlord (and the fact that you have a roof over your head which is great). If you buy an appreciating asset like a house, you're pretty much paying yourself as you can later sell that home and get your money back (and more as the home value most likely made you money in the form of equity). Renting for a long period of time is not the wisest option for your financial future. It's true what the couple said that a million dollars pays you (assuming the market does well, which it has done so historically) and a house doesn't work the same as an investment fund, but that's a different debate. RU-vid Dave Ramsey for more practical advice. Again, pay yourself and buy a home (you do have to live somewhere) than rent. It's okay to rent temporarily but not for life like this couple. It just isn't smart.

When you are making 100k each you can save 500k pretty quickly. Most of these FIRE people have very high paying jobs in IT and engineering.

Their first mistake was living in a big city in canada, you aren't suppose to spend all of your money on a house, you need to buy a cheap house, fix it up, live in it, all while investing most of your money else where. That way when you retire you have your house payed off, and you get the passive income. They are creating a false delemia saying that you either have a one million dollar house or a one million dollar investment profile.

"Having a low rent and not having a car was a big part of it." Yeah, I bet it was. Most people don't have low rent (compared to their income). Most people don't live where they don't need a car. If you are living in an area in which housing costs $500K, then goes up to $900K, how do you find cheap rent? It doesn't make sense. I just moved out of San Francisco. I know a few people there who make good money. But that can't buy a house because they can't save enough to buy a house (at least not in the Bay Area). Why can't they save money? Because of high rent. The two go hand in hand. In a market in which houses sell for $1.2 million, rents are proportionately high. That's how it works.

I agree 100% what he said at the end "If you figure out money life is insanely easy"

I was saving to buy a house but right now, i feel like investing it on my portfolio is a better choise. It's true. A million dollar house wont pay you as much as a million dollar portfolio.

Kristy is so funny! I just read her book and she cracks me up. Great book with sound advice.

Take care of your health and wealth and the rest of life falls into place easily.

I applaud these guys for making this decision.

why not buy a 1bed 1bath condo or a little flat townhouse you don't have to buy a house you'll get tired of rent going up things may or may not get fixed and a lot of times you can own a condo cheaper than rent in the same area

For many...it’s an investment and security. 😉 No risk of eviction, or if the owner sells you must vacate, no rent hikes, etc...it’s stable and predictable. If you lose your job or break a leg/arm, you can rent out a room to help cover costs. (Subletting is not usually allowed with leases or rental agreements). But! To each their own. It just depends on what you want your lifestyle to be and what your lifestyle currently is. 😊

Real estate is a great investment, as long as you're not buying in a bubble market. Smaller cities experiencing high growth rates are good markets to buy property in. It's also a more stable investment, long-term.

I love what they did but key components they forgot to say : 1. Have a job that puts you in the "middle class". They probably make $100k per person. Easy to save $500,000. 2. You can't do this alone! Make sure your spouse is in that same income bracket. Make sure you HAVE a spouse. People tend not to realize that they more than likely wouldn't have gotten their on their own. 3. Don't have kids until you "retire". Having kids early will be like going backwards. 4. Don't live beyond your means. Duh. 5. Have an investment. This couple used an investment portfolio, but the average person doesn't know anything about that. You gotta have the knowledge to know how to spend your money. Unfortunately, they don't delve into details about that in this piece

Now take that money and buy a really nice house in Alabama for $150,000 and two Tesla 3s and they'll still have $250,000 left from their savings and live happily ever after.

I figured this out like 10 years ago. I have 25k saved. And it keeps going up.

Traditional 'Home ownership' as we commonly call it should not be the key. My question would be, why not buy a small condo, or townhome? Does the $900 a month (or X amount more than property taxes & HOA dues) one spends on rent, going towards nothing, win out over owning a place that is paid off? I wouldn't think so...

These guys should be life coaches. They really put a smile on my face and gave me a nice start to the day. Owning a house is such a life suck 😕.

Why do people actually want to retire early? I have a great, well-paid job that I enjoy doing. I probably could retire early, but would probably be pretty bored if I did. This interest in early retirement speaks more about job dissatisfaction than anything else IMO.

This news feature was the best thing that I ever came across back when it came out. It stopped us from buying a money pit rental property and started us investing. Should be ready to retire in 7 years if we want to and we only started 3 years ago. And this 7 year FIRE goal is also includes putting 2 kids through university. We should have done RESP's back in the day but we didn't know much about it. Bryce is so right. We have to be financially literate and life gets easy.

They are seriously way too hyper. Holy cow

Honestly thought about this, but in the end I decided to keep home ownership as a goal because it's an asset that can transfer to my future kids or grandkids, saving them the trouble of having to save for a home or rent.

He is not 100% correct. He said "1 million dollar porfolio will pay you..." wrong!!! wait until you lose 20-30% on portfolio then you probably regret not buying a house. Stock portfolio does not always guarantee returns. remember 1999 or 2008? I still think buying a moderate house/condo is the key to early retirement.

In the US mortgage interest deduction makes houses under $750k really lucrative.

Funny that he says that a 500k house becomes 900k, but it's somehow not a good idea to buy. Had he purchased that 500k house with a 5% down payment (25k plus fees), he'd have an extra 400k. With this statement, he proves that his own approach is flawed. Real estate produces more millionaires than anything else and it's due to leverage. Saving every cent can work, but leverage will make it 10000 times easier.

I bought a pair of duplexes, I live in one and rent out the rest. I live rent free. Best move I ever made.

Rent and invest in dividend stocks. Use 4% withdrawal rule. Smart. And ,as they say, easy as pie.

I think a lot of people could retire early if they stop buying unnecessary consumer goods. That's the way this couple saved, they didn't buy useless stuff, including a car. Or live a semi-retired lifestyle for many years, just work part-time and have a good balance. Because retirement could also be pretty boring and lack a sense of purpose.

Lol, your face expression makes me laugh!”There’s nothing crazy.” 1:00 You are a nature comedian!

Bought my home in Toronto in 2006. Paid off. Now it’s over a million . I will retire when my kids leave the house.

Truth be told, I'm freaked out when it's time to sell my house with this millennial generation coming up and the global market subside, huge bubble looming.

The biggest money saver they mentioned is not having a car. If you can live in a area where you can walk to work/school/errands you are saving so much more than you realize. You can buy a car later in life when you need one

They moved back with their parents. If that's considered "retirement" then ok.

Funny, my experience was the opposite. Owned 2 homes (consecutively) that I lived in. After 33 years cleared $1M.

It's true that you need a high-paying white collar job for several years with a saving rate above 50% before you can do what they did, but that doesn't make their lifestyle invalid. Not everyone can do it, but those who can should consider it.

It helps to have a dual high salary, and low rent. No expenses, no kids, no parents to take care of, no property taxes, no car insurance, car payment etc.

They have done an amazing job. Good education, work ethic, discipline and an outside of the box thinking that enabled them to achieve their goals. The naysayers are the ones who do not have the discipline hence they complain.

Homeownership is your hedge against inflation. Rent will continue to rise with the market. You will have nothing to show for it in the end. My parents purchased a new home on the 70s for $21,000. My mother still lives in it but she could never afford to rent it in today's market. Penny wise and pound foolish

The most important thing is discipline.

I would like them to explain how they travel the world for $40K I was just on vacation the prices were the same as if not more then the USA and the sales tax was 13%

wait till your stock portfolio crashes 50% in the next crash, then you will have to unretire and get back to work! These people have not lived that long to go through realistic economic cycles... their limited experience makes them incredibly naive.

Read The Millionaire Next Door by Thomas J. Stanley and William D. Danko. The, "live below your means and invest wisely" philosophy is how many millionaires are made and, the reason they are next door is that they don't live like millionaires. That's kind of the point. Two Engineers could buy a home and still live below their means, but by not buying a home, the money will grow that much faster.

LOL so their entire retirement "plan" is hinged on the stock market giving them a 4% return every year????? That's a really bad idea

I don't think renting makes sense if you have children. You want a yard, storage space, the ability to bolt baby gates to the wall etc, and you don't want to be asked to leave when your lease ends.

I like these people. I wish everyone was as sensible!

DINK, high income, and no grad school assuming you don't need one for engineering... Very rare combo

Buying a home is NOT an asset.... You NEVER own your home..... Don't pay property tax and see what happens. It's illiquid, you have maintenance cost.... Assets pay you..... A house doesn't pay you

Why not both? Assuming you're making good money and don't have children, you might as well invest in a diversified portfolio. Pay off a house quickly by not having debt outside of a mortgage while also investing 15% towards your retirement. You can pay off the house in 10-15 years and any income after that goes into savings + new investments since you'll only be paying taxes/insurance/maintenance. This only works once you're above a certain wage so I would recommend following their advice by having roommates to keep rent manageable and putting money aside for maybe training that can lead to a higher income career.

"If you figure out money life is incredibly easy. But if you never figure it out, life is insanely hard." Well, no sh*t... lol..If I could roll my eyes any more, I'd smoke them.

she might have forgotten inflation...ten years from now, your 500k becomes 400k and it keeps diminishing...you need at least one million per person to retire with a paid off home.

I knew this before I had 5 kids. I chose to have the kids. I am rich , I am not a millionaire , but I am happy , my wife is happy the children are happy . We go on vacations all the time all over the world , all of us. I am an engineer just like they are , my wife has a Masters degree in Nursing . Our house has increased in value since we bought it in 2001 , and in the last 2 years significantly . I am positive we are in a much better position than they are in......life cannot be just about the money.

I Save money consistently maybe one day we'll buy a home but rent is cheap and the portfolio keeps growing

Investing in stock is all well and necessary, but risky. Owning property is part of building a diversified portfolio. It is insane to cut that out of one's retirement egg. At their income level, 30 is way too early to retire. Inflation is going to catch up with these guys and hit them hard.

So. They travel all the time. Where do they stay? Hotels? So they have to pay to stay in a room. They are paying the owner of the hotel his mortgage and taxes.

I think what they've done is great, and once you're talking about those levels of savings compound interest will work wonders. However some of us need homes to raise children.

when the next recession hits and you still need to withdraw 40k for your life expenses, thats what hurts. imagine recession last 1.5 years and the portfolio drop 30%. so you withdraw 60k out of 1m * 70% = 700k. thats 10%. the thing is 1m is not enough to retire early. you cant just withdraw all your gain. 1m you can expect 6 - 7% annualized gain and about 4% after tax, which makes sense. I would suggest these couple to save a bit more so they can save a buffer during good years and ok years for the bad years.

Poorly reasoned. It’s about choices. They are comparing apples and oranges. Not uncommon. My fixed mortgage plus taxes, maintenance, insurance, HOA is 60% of what it would cost me to rent in my area. My down payment is returning 8% average annual return (on paper of course). Now if I want to rent a similar house in a ghetto 35 miles south, yes I can save money. But I can also buy there for a lot less too. Rents are always tied to local home values. So no, renting is not always the solution because rent will increase ever year, fixed rate mortgages don’t. Renting is great for city hoppers, and those who can’t come up with a 20% down. Nothing will ever replace being a smart buyer. I waited, saved and bought in summer 2012. Yup the bottom of the market.

I dont get it. Where are they living? Their parents basement? Paying a mortgage is still paying yourself. Its a forced savings. I dont question what they did but i dont get how a home gets in the way of that. They simply made a chouce to put their money somewhere else. Doesnt mean home owners are broke! Plenty are sitting on million plus assets as well.

I've got a house for rent, they can rent it and pay my mortgage for me if they want.

I managed something similar by working, saving, investing in Tokyo, instead of buying an American house in Silicon Valley with huge mortgage like my colleagues. Then when the real-estate market tanked in 2008, we had the CASH to buy the Silicon house at about 50% its previous price, mortgage-free. Resulting in FINANCIAL INDEPENDENCE and EARLY RETIREMENT (at 40), travel the world young. Of course, much depends on LUCK. If you have kids, you want a house, even with a mortgage. Current events (Covid-19, March 2020) have threatened this arrangement, but then everybody ELSE is in WORSE shape. And markets always REBOUND (eventually)....

Eventually the rent will be more than your mortgage payment

I dunno, but to me it doesn't seem like you've truly retired if your living off the stock market. Monitoring all that would likey be a full time job in itself. Not to mention the greater risks involved.

Maintenance taxes and insurance crushes the aversge appreciation of the house. And since the bank front loads the interest you really only "pay yourself" in the later years of ownership. Putting down the minimum and borrowing from the bank is a scam.

Unmarried, childless, shallow, rootless high-income techies. Notice how he says "saving for a down payment" which suddenly is them having 500k, the erstwhile full price of the house?

Ok wait. So, by the time they saved $500k the house that was $500k was now $900k. So, if they bought that house they would have made a $400k profit instead, they had to save and save when the market would do it for them.

People are starting to finally realize that there is a massive opportunity cost to purchasing a home. You could put that money to much better use in starting or buying a business that will actually put money in your pocket as opposed to draining it.

ok so instead of playing the housing market they are playing the stock market..... well you do you.

Buying homes especially in California is insane in a high tax bankrupt, corrupt, mismanaged state.

So....When they stop travelling then they have no home of their own to return to..... so they become couch surfers 😃

Most people aren't hearing one of the key factors of their success... NO CAR. Find a comfortable place to rent, near your work, and either walk, bike, or take transit. Cars are money pits and horrible for the air we all breath.

Were they actually trying to save 500k for a 500k house? Put 5% down, live in it for a bit and sell it at 900k. They missed the boat.

I'm not saying this isn't a solid plan for some. But, these results don't seem typical. You need 2 people with a solid income and little debt. For the rest of us it would take forever to save that kind of cash.

they should not be financial advisors, any one who shun real estate as a wealth builder isn't thinking long term wealth building at all. The negatives they cite in home ownership is basically investment costs that should continue to add equity to potential real estate investment. They probably timed a good stock market and probably went all in on Netflix.

I retired at 40 (renter with no hydro bill, living on the TTC line) not an Engineer: worked for minimum wage and free-lance jobs since 1990: which was the first graduate recession. ALSO: NO STUDENT DEBT (worked for Tuition each year: no loans). Peers with condos can't afford the fees anymore and can't sell the condo because the ceiling fell down and the dryer blows fluff into the living room and the plumbing went last year along with the shelves in the closets and no money to fix it up for decent living at this point in time. My stove breaks down on Wednesday: it is fixed or replaced by Thursday. Walls replaced last year and suite re-painted.

Well what ever it causes (aheem), I did watch my dad do makeovers and maintenance and repairs of all kinds, roofs, heaters, flooring, termite treatments, painting, siding, building a bathroom, landscaping, snow removal, Bla bla bla and it cost him a bundle to keep his house nice. Considering I never had the income or marriage power to buy a home, I’m somehow not worried I didn’t - life is full enough of headaches and let-downs without the worry of what thing your house is going to do and end up keeping you poor all the time..... it enslaves you! Who wants that? Good lord, raising 2 kids and keeping a job was enough work & worry for me!!

The biggest thing here is that they did not have kids and are a couple working in a high tech field that pays them well. I love owning my own home and don’t want to live in a low end apartment and would not trade in my car for the bus either. Taking the bus would add over two hours of commuting per day to my just under twenty minute drive to work. What is time worth? Travelling the world is terrific but not if you are a home body. My point is that everybody is different and it is simply not living above your means and saving that will determine your retirement.